EXHIBIT 10.50(b)
ADVANCED MICRO DEVICES, INC.
SECRETARY'S CERTIFICATE
The undersigned, Thomas M. McCoy, certifies that he is the Secretary of
Advanced Micro Devices, Inc., a Delaware Corporation ("the Company"), and that,
as such, he is authorized to execute this Certificate on behalf of the Company,
and further certifies that the attached is a fair and accurate translation of
the Determination Regarding the Request for a Guarantee by AMD Saxony
Manufacturing GmbH.
WITNESS the signature of the undersigned this 13th day of May, 1997.
/s/ Thomas M. McCoy
--------------------------------
Thomas M. McCoy
Secretary
[SEAL APPEARS HERE]
D e t e r m i n a t i o n
Regarding the Request for a Guarantee by the
AMD Saxony Manufacturing GmbH, Dresden
1. Borrower
AMD Saxony Manufacturing GmbH [Gesellschaft mit beschrankter Haftung; private
limited liability company], Dresden
2. Extent of Credit
Investment credit up to a total of 1,650 Million German marks (DM) (including
any additional investment credits of up to DM 150 Million in accordance with
Sub-Clause 9 b), third line)
Based on model credit agreement F. 13 September 1990 (1993 version), the credits
must be notarized in accordance with the "Notices" (1993 version) well known to
the borrower and to the creditor.
3. Creditor
Bank consortium under the direction of the Dresdner Bank AG [Aktiengesellschaft;
stock corporation] Frankfurt am Main [Frankfurt on the Main River]
1
4. Conditions
Pay-out/Interest Rate: In accordance with prevailing market conditions at time of notarization
Term: until 31 December 2006
Repayment: In twelve six-month installments in 2001 until 2006, starting
on 30 June 2001.
5. Scheduled Notarization and Value Dates
DM Millions
up to 31 December 1997 [*]
up to 31 December 1998 [*]
up to 31 December 1999 [*]
up to 31 December 2000 [*]
---
[*]/*/
/*/ without any additional investment credits of up to DM 150 Million in
accordance with Sub-Clause 9 b), third line
6. Guarantees of the Federal Government and the Free State of Saxony
All told, 65 % of the possible shortfall with proportionate parallel guarantees
of 39 % from the federal government and 26 % from the Free State of Saxony.
Model document F. 04 January 1993/03 August 1994 federal government/
states (with an advanced right to payment) in accordance with "Notices" F. 12
October 1990 (1993 Version) is applicable for the guarantees.
2
*CONFIDENTIAL INFORMATION OMITTED &
FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION
7. Credit Usage
Partial financing of the following borrower's investment program:
a) Approximately DM 2,207 Million for building a microchip factory,
b) Approximately DM 25 Million for building a development center, and
c) Approximately 14 Million for real estate to be acquired within the City of
Dresden. The above is in accordance with the following investment planning/1/
for 1996 - 2000, plus other (follow-on) investments starting in 2001 to the
extent of approximately DM 697 Million:
1996 1997 1998 1999 2000 Total
- -----------------------------------------------------------------------------------------------
$ $ $ $ $ $
Million Million Million Million Million Million
- -----------------------------------------------------------------------------------------------
Wafer Factory
Building and Infrastructure
Facilities and Equipment [*] [*] [*] [*] [*] [*]
Development Center [*] [*] [*] [*] [*] [*]
Building and Infrastructure
Facilities and Equipment
Real Estate [*] [*]
[*] [*] [*] [*] [*]
[*] [*] [*] [*] [*] [*]
- -----------------------------------------------------------------------------------------------
[*] [*] [*] [*] [*] [*]
- -----------------------------------------------------------------------------------------------
The results and financial planning of the borrowing corporation for 1996 to
2006/2/, including the scheduled initial losses (enclosed as an attachment), are
applicable for the total financing.
- -----------------------
/1/ US dollar investment planning converted at a US dollar exchange rate of
approximately DM 1.45
/2/ US dollar investment planning converted at a US dollar exchange rate of
approximately DM 1.45
3
------------------------------------
*CONFIDENTIAL INFORMATION OMITTED &
FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION
8. Security of the Loan
a) Registration of first ranking mortgages in a total credit amount on the
borrower's entire real estate holdings.
b) Transfer of ownership of the machines and mechanical systems procured/to be
procured within the scope of this project and unencumbered by a third
party.
c) In line with customary banking practices, transfer of ownership of the
inventories and assignments of claims (without any previous or equal
allowances for other credits), as well as transferring the rights and
claims from the agreement to be concluded with AMD Inc. regarding non-
exclusive licenses for commercial copyrights, which, if applicable, are
generated within the development center in Dresden.
Signing of a collateral security pool agreement is recommended.
9. Other Stipulations
a) The following must be proven to the creditors before the guarantee becomes
effective:
- That the borrower's registered capital to be obligated with DM 217.5
Million from AMD Inc. (equity holders of the borrower) is entered in
the commercial register and that, as a minimum, one-half is deposited,
- That all important authorizations and similar documents required for
implementing the project are available, and
- That binding commitments of the investment and interest subsidies
applied for from the Free State of Saxony are available in the sum of
approximately
4
725 Million. The guarantors assume that committed investment
subsidies, as required, are financed on an interim basis by the bank
consortium.
b) AMD Inc. is obligated to the following before the guarantee becomes
effective:
- To provide the remaining payments on the borrower's registered capital
in 1997 at the latest,
- To guarantee subordinate internal corporation loans of a total of DM
[*] to the borrower. These loans must be paid in 1998 and 1999 at the
rate of DM [*] per year. Interest and repayments on internal
corporation loans require the previous consent of the creditors and
guarantors during the term of the guarantee credit,
- To finance any total investment costs expected for building the
factory in Dresden (including a development center) exceeding DM 2,246
Million up to an excess amount of a total of DM 225 Million with
additional equity resources and bank credits (with 65 % participation
by the guarantors) in the ratio of 1:2 and to finance any other
investment costs over and above the preceding excesses to the full
amount with additional equity resources.
- To sign a "take off" agreement for complete acceptance of the
production of the factory in Dresden based on a 100 % reimbursement of
costs expressed in German marks corresponding to German cost
accounting principles and including the development center, plus a
profit margin of 10 % at completion (expected at the latest in 2001,
according to plan), and subject to the following provisions:
-- Cost reimbursement clauses for unexpected initial losses in 1996
through 1998, plus an adjustment for 1999 and 2000 with
5
------------------------------------
*CONFIDENTIAL INFORMATION OMITTED &
FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION
employment-independent complete cost reimbursements by AMD Inc.
to the extent of 75 % and 105 %;
-- Take over by AMD Inc. of the market risks for capacity
utilization ranging from 75 % to 100 % of the planned/normal
utilization with a guarantee of "a stable cash flow" within this
utilization range.
Complying with the above adjustments must be verified in each case by
the auditor within the scope of the borrower's annual audit.
- Within the scope of a separate agreement of the AMD Saxony
Manufacturing GmbH at completion, to guarantee the allocation of
additional equity capital or additional subordinate internal
corporation loans up to a total amount of DM 145 Million, when and to
what extent a "debt servicing coverage" of one year to be defined by
mutual consent with the creditors drops below the factor of 1.25.
- In accordance with the principle of equal treatment, to distribute
proportionally any market-related adaptations of the production to all
factories of the AMD group manufacturing products comparable to the
borrower's products, provided the actual capacity utilization of the
AMD Saxony Manufacturing GmbH does not fall below 75 % of the
planned/normal utilization. Differing distributions are only
permitted when AMD Inc. compensates for the resulting deterioration of
the AMD Saxony Manufacturing GmbH cash flow by additional equity
resources or by additional subordinate internal corporation loans.
Designating other affected AMD factories and monitoring compliance
with the principle of equal treatment are performed in an appropriate
manner by consulting a neutral third party.
6
- To ensure that the borrower's sustained cash flow excesses are used
within the scope of a separate adjustment to be agreed upon between
the borrower and creditors for the early repayment of the guarantee
credits.
- To conduct bona fide research in the Dresden factory in addition to
production and to design and develop state of the art products in the
development center. The following written statement released on 18
January 1996 by AMD Inc. applies in this context:
"In this regard, the Design Center will be an authentic research and
development center. Two hundred highly qualified personnel will
research and develop new products. A large part of the activity
will extend into independent research of modern technology, with the
main focus being the development and design of new products. These
products will be produced not only in Dresden but worldwide in AMD
factories. The product palette is expected to include a wide
spectrum of modern digital components, such as microprocessors and
circuits for the telecommunication and multimedia-media fields.
Analogous to the Design Center at our locations in the United
States, personnel will also redesign and develop variations of
existing products."
c) The following written statement released on 18 January 1996 by AMD Inc.
applies:
"We agree that a qualified buyer of the business should be capable of
manufacturing his own products in the factory using existing equipment
and facilities should AMD become in default and the banks take over
the factory. We believe that the factory and the existing equipment
are sufficient for operations. A qualified buyer would, therefore,
not be hindered from manufacturing his own products in the factory."
d) Extending outside of the "take off" agreement, any exchange of delivery and
performance obligations between the borrower and AMD Inc. and companies
under the influence of AMD Inc. must be completed based on customary market
conditions. In this regard, the auditor's opinion must be considered
within the scope of the borrower's annual audits.
7
e) The acceptance of this determination of guarantee also encompasses the
acknowledgment that AMD Inc. has taken note of the written notice reported
on 4 October 1995 by the C&L Deutsche Revision regarding subsidy-relevant
facts. This also applies to the credit borrowing corporation AMD Saxony
Manufacturing GmbH.
Bonn, 2 July 1996 Dr. Hirsch signing for the Dr. Wenzel signing for the
Federal Ministry of Commerce Federal Ministry of Finance
Dresden, 2 July 1996 Schlicht signing for the Saxony Hille signing for the Saxony
State Ministry for Commerce State Ministry of Finance
and Labor
Dusseldorf, 2 July 1996 Sinne and Biener signing for the
C&L Deutsche Revision AG
Auditing Company
8
Gesch.-Z: 872 277 Villemombler Street 76,
53123 Bonn
(Please Specify when Replying)
Telephone: (02 28) 615
or 615 - 0 (Operator)
Fax: (02 28) 615 - 44 36
Teletext: 228340- BMWi
Telex: 8 86 747
Federal Ministry of Commerce - 53107 Bonn
- -----------------------------------------
Dresdner Bank AG
Business and International Branch
- - Special Financing -
Attention: Dr. Fahrholz/Dr. Leimbach
Weser Street 43
60301 Frankfurt am Main
Regarding: Federal/State Guarantees;
- ----------
In this Case: AMD Saxony Manufacturing GmbH, Dresden
-------------
Reference: Your Request dated 2 October 1995
- ----------
File Designation of the C&L DEUTSCHE REVISION AG,
Dusseldorf: BB 278 (B)
In the inter-ministerial committee with consent of the Federal Ministry of
Finance and representatives of the responsible state, I have reached the
determination delineated in the
12
enclosed correspondence from the C&L DEUTSCHE REVISION AG, Dusseldorf, dated 2
July 1996.
Please conduct all further correspondence in this matter directly with the C&L
DEUTSCHE REVISION AG, Dusseldorf, as the mandatary entrusted by the federal and
state governments with the management. Please specify the file designation of
the C&L DEUTSCHE REVISION AG stated in the above Reference.
Sincerely,
per direction
/s/ Dr. Hirsch
Dr. Hirsch
13
Attachment III
--------------
F. 13 September 1990 (1993 Version)
Federal/States and/or THA [Treuhandanstalt; Trustee Administration]
M o d e l
C R E D I T A G R E E M E N T
The following credit agreement is herewith entered into
between the
(Creditor)
and the
(Borrower)
(S) 1
Extension of Credit
--------------------
The creditor grants the borrower credit in an amount of up to
DM
(in words: German marks)
(S) 2
Credit Usage
------------
In accordance with the summarized demands and financial planning presented in
Attachment I, the credit must be used for financing the borrower's business.
14
From the credit in the amount of DM , a partial amount
of DM is provided for financing operating funds. In the amount of this
partial amount, the credit can be used on a revolving basis within the scope of
the credit term provisions in accordance with (S) 4/4/.
(S) 3
Payment of Interest
-------------------
The credit must be paid as follows starting from the date of disbursement:
a) Partial Amount of DM (Investment Financing)
b) Partial Amount of DM (Operating Funds Financing)
(S) 4
Credit Term
-----------
The credit has the following term:
a) Partial Amount of DM (Investment Financing):
Up to with (six months) yearly repayment installments of
DM each; first installment due on ; last installment due
on .
b) Partial Amount of DM (Operating Funds Financing):
Up to with complete repayment on this date at the latest.
- ----------------------
/4/ This paragraph and the variations in credit and collateral envisioned
hereinafter are not applicable provided no financing of operating funds is
taking place/is guaranteed.
15
(S) 5
Collateral
----------
1. The credit is secured by a percentage of a deficiency guarantee from
the Trusteeship Administration and/or by a percentage of deficiency
guarantees of the Federal Republic of Germany and the State of
.................. in the form known to the creditor and to the borrower.
The determination of guarantee is enclosed as Attachment II and is a
critical component of this credit agreement. All provisions/obligations to
be incorporated into the credit agreement in accordance with the
determination of guarantee are agreed hereto, even though they are not
separately delineated in this credit agreement.
The guarantor(s) is/are entitled to employ a representative in
administrating the guarantee.
2. Moreover, the credit and any possible rights of recourse of the
guarantor(s) are secured as follows/5/:
a) Partial Amount of DM (Investment Financing):
Mortgages in the amount of the credit on the borrower's entire
(commercial) real estate holdings/6/, ranked according to mortgages of
DM for securing unauthenticated credits.
- -------------------------
/5/ Employing a collateral trustee is recommended.
/6/ If necessary, to be appropriated by means of descriptions in the real estate
register. In the case of indeterminate real estate relationships, to
be possibly relativized by obligation for the first possible mortgage
designation.
16
b) Partial Amount of DM (Operating Funds Financing):
Moveable collateral on the borrower's working capital (with equivalent
appropriation and, as necessary, delineation of priorities).
The mutual, directly subordinate joint liability of the respective
collateral is agreed herewith.
Regarding mortgages: In the case of registrations having higher priority,
requires the agreement of customary ordered collateral measures.
3. If necessary, further or other provisions for providing collateral in
accordance with the determination of guarantee.
4. The borrower is obligated to pledge currently non-encumbered and/or future
acquired real estate holdings which are used or intended to be used for
commercial purposes.
5. In the case of deterioration of the collateral, in particular by a decline
in value and/or losses, the borrower must designate additional collateral
in accordance with the demands of the creditor or must correspondingly pay
back the credit.
17
(S) 6
Consent Requirements for Critical Measures
------------------------------------------
Provided a direct or indirect majority participation of the Trustee
Administration no longer exists on the part of the creditor, then the
following applies/7/:
1. The borrower is obligated to obtain the prior consent of the
guarantor(s) for critical new capital and financing investments, for
assuming critical new obligations, and for disposing of critical
operational entities and holdings.
2. Possible further consent reservations in accordance with a
determination of guarantee.
(S) 7
Termination
-----------
The creditor has the right to terminate the credit at any time demanding
immediate repayment in total or in part based on critical reasons. In
particular, a critical reason exists when
1. The borrower is in default for longer than 3 months with the payment of
interest and repayment agreements,
2. The creditor determines that other critical contractual obligations have
been violated by the borrower,
- --------------------------
/7/ The preamble becomes void in the case of an exclusive federal
guarantee/state guarantee and when no direct or indirect majority
participation of the Trustee Administration exists from the beginning.
18
3. The borrower's statements regarding his capital and income relationships
are subsequently proven as incorrect or incomplete in critical aspects,
4. The borrower suspends his payments; the start of enforcement, settlement or
bankruptcy proceedings regarding the borrower's capital is requested; or
enforcement takes place in critical parts of the borrower's capital.
5. Other circumstances occur or become known which jeopardize credit
repayment.
(S) 8
Insurance Obligations
---------------------
During the term of the credit, the borrower must adequately insure all of his
buildings, machines, other facilities, inventories and similar items against the
customary risks.
(S) 9
Reporting
---------
The borrower is obligated
1. To prepare his annual financial statements in accordance with commercial
principles for large capital corporations and to present to the creditor
and to the guarantor(s) on a regular basis his annual financial statements,
including a situation report and supplement, immediately after filing and
approval. Moreover, the auditor's report must be submitted to the
guarantor(s).
2. To report semiannually to the creditor on the usage and handling of the
credit.
19
3. To report to the creditor on critical business processes and, on demand,
its overall economic condition.
(S) 10
Rights of Audit
---------------
1. The guarantor(s) is/are entitled to perform at any time an audit of the
borrower or to have it performed by a representative, regardless whether a
recourse can be considered from the guarantee or whether prerequisites
exist or have existed for an audit of this nature.
2. The creditor is entitled to deliver to the guarantor(s) all documentation
which affects the credit and collateral, and to provide all information
demanded by this/these guarantor(s).
3. The borrower pays the costs of all audits and expert opinions specified as
required by the guarantor(s) for the assumption of and in relation to the
guarantee.
(S) 11
Guarantee Compensations
-----------------------
(Version for the THA/8/)
During the term of the credit, the borrower must submit to the guarantor(s) the
following guarantee compensations:
- ----------------------------
/*/ For federal/state guaranteed credits, the adjustment in accordance with
Section B of the "Notices" in the 1992 version applies in this case and must be
agreed to in this form in the credit agreement.
20
1. 0.25 % of the maximum liability amount to the creditor for the principle
claim specified in the instrument of guarantee, when delivering the
instrument of guarantee;
2. 0.25 % of the guarantee sum in effect on the following first of April and
first of October of each year for each six month period starting at these
dates. (The guarantee sum is specified in the instrument of guarantee as
the maximum liability amount for the principle claim less any repayments.
Interim credit repayments are not considered repayments when using
revolving guarantees/partial amounts of the guarantee.)
Compensations must be transferred to THA-specified accounts by indicating the
guarantee number(s) delineated by the creditor.
(S) 12
Concluding Provisions
---------------------
1. Any modifications to this agreement must be in writing.
2. All taxes, fees and other costs resulting from this agreement and its
implementation are the responsibility of the borrower.
3. Provided a provision of this agreement should become null and void,
contestable, or not legally valid based on other reasons, the applicability
of the remaining provisions is not affected herewith. The partners to the
agreement are obligated, moreover, to replace the invalid provision with a
provision equal in its result, if possible.
21
4. Place of performance and place of jurisdiction is
......................., [date] ........................[date]
The creditor: The borrower:
22
Attachment IX
F. 04 January 1993
------------------
FEDERAL/STATES
General conditions for guarantee assumptions by the Federal Republic of Germany
and the states of the accessing region.
I. Requirements and Conditions
--------------------------------
1. Conditions and requirements specified in writing by the federal/state
governments are an integral component of the statement of guarantee. As
far as the credit relation is concerned, they must be incorporated into the
credit agreement.
II. Credit Agreement
---------------------
2. Modifications to the credit agreement approved by the federal/state
governments based on the respective valid model of a credit agreement and
forming the basis of the guarantee require the previous consent of the
federal/state governments.
3. Based on the factual situation, the creditor is entitled to grant a
proposed delay of interest and repayments up to a maximum six month period
and up to the maximum amount of owed interest and repayment installments.
23
III. Transfer
--------------
4. The guaranteed claim can not be transferred or pledged without the previous
consent of the federal/state governments. In this regard, transfers are
excepted to banking institutions or other institutional investors having
their principle place of business within the territory of the European
Common Market, provided the creditor continues to observe the fiduciary
administration of the rights and obligations from credits/guarantees.
IV. Obligations of the Creditor
-------------------------------
5. The creditor must exercise the prudence of an ordinary businessman when
granting and handling the credit. The fact of a federal/state guarantee
must not reduce this prudence.
6. The federal/state governments are released from the guarantee vis-a-vis the
creditor, when the creditor violates an obligation incumbent upon him in
accordance with this guarantee. This does not apply in the case of
negligent violations, provided the deficiency has not been caused by the
violation.
The federal/state governments can terminate the guarantee vis-a-vis the
creditor to take effect immediately, when the creditor violates an
obligation incumbent upon him in accordance with this guarantee and,
despite requests, the obligation has not been discharged within a
reasonable, fixed time period.
7. The creditor must immediately inform the federal/state governments when
a) The borrower is in default of the agreed to interest and repayment
installments on the guaranteed credit for longer than three months;
24
b) The creditor determines that other critical credit conditions have been
violated by the borrower;
c) The creditor determines that the borrower's statements on capital
relations have been subsequently proven as incorrect or incomplete;
d) The creditor discovers that proceedings on the enforcement, settlement
or bankruptcy regarding the borrower's capital have been initiated;
e) The creditor becomes aware of other circumstances jeopardizing, in his
opinion, the repayment of the guaranteed credit.
8. The creditor is obligated to exercise his contractual right of termination
when requested to do so by the federal/state governments. Herewith, the
creditor's justified concerns must be taken into consideration.
9. The credit must be secured in accordance with the provisions of the credit
agreement. The collateral to be designated secures the entire credit.
Designating special collateral for the creditor's risk percentage is not
acceptable without the consent of the guarantor. The creditor reserves the
right to demand from the borrower the designation of additional collateral
or an equivalent repayment of the credit in case the collateral
deteriorates, in particular resulting from a decline in value and/or
losses.
10. As soon as and provided the collateral designated for the credit and/or
other available collateral correspond to the investment principle generally
followed by the creditor, the creditor must inform the federal/state
governments on this point. The creditor as well as the federal/state
governments will then agree to what
25
extent, corresponding to the intrinsic value of this collateral, the
federal/state governments can be released from their guarantees.
11. Provided the rights from the collateral designated for the credit do not
pass over from their guarantees through operations of the law to the
governments in accordance with the performance obligations of the
federal/state governments, the creditor is obligated to transfer these
rights (proportionally) to the federal/state governments.
If the creditor is satisfied from these guarantees as a result of recourse
by the federal/state governments, then the creditor must administer and
utilized the rights passing over to the federal/ state governments through
operations of the law or through transfer with the prudence of an ordinary
businessman in a fiduciary manner without special compensation (expenses
will be reimbursed).
V. Default
-----------
12. In the case of default on the part of the borrower with owed performance
obligations, the interest rate must be withdrawn starting with the
occurrence of the default. This interest rate can be asserted as a claim
for damages against the borrower. The amount of the claim for damages is
limited to the discount rate plus 3 percent per year, unless a higher
substitute claim is proven in this case. However, the contractually agreed
upon standard interest rate approved by the federal/state governments can
not be exceeded in any case.
Other damages due to the default, compound interests, interests charged
during an agreed to delay, compensation interests, prosecution interests,
overdraw interests, processing fees and auditing costs are not covered by
the guarantee and can also not be directly incorporated into the deficiency
accounting vis-a-vis the federal/state governments.
26
VI. Deficiency
---------------
13. Deficiency is applicable for the guaranteed credit when and provided the
inability to pay on the part of the borrower is shown by suspension of
payments, initiation of proceedings on enforcement, bankruptcy or
settlement; as a result of releasing insurance in lieu of an oath in
accordance with (S) 870 ZPO [Zivilprozebbordung; code of civil procedure];
or in any other manner. Nominal receipts from the utilization of credit-
designated collateral or from the utilization of the borrower's other
capital are not or no longer expected.
14. Even when the prerequisites of No. 13 are non-existent, the deficiency is
applicable in the amount of the entire credit claim not yet paid or
recovered, including interests and any costs, when an owed capital or
interest amount has not been paid within twelve months in accordance with
written payment demands issued after the maturity. The claim for the
remaining credit must, however, be overdue for at least six months. After
the maturity of the guaranteed principle and incidental claims, the
creditor remains obligated to try with the prudence of an ordinary
businessman to collect or to recover the claims and, if necessary, to
utilize the collateral, and to report on the situation to the federal/state
governments. This obligation is suspended as long as the federal/state
governments have not granted a directive which is reasonable according to
the circumstances and which has been demanded by the creditor. Employing
forceful measures with the borrower requires, moreover, the previous
consent of the federal/state governments.
15. On request from the federal/state governments, the creditor must formulate
a draft accounting of the deficiency.
27
16. Federal/state governments are entitled
a) To pay progress payments on the expected guarantee indebtedness to be
obligated,
b) To discharge their guarantee obligation instead of in a total amount
according to the maturity date for interest and repayment performance
obligations established per the credit agreement for the case of proper
servicing, but pursuant to the fact that the first payment from the
federal/state governments must take place in accordance with Nos. 13
and 14 once the deficiency has been determined.
VII. Audit Rights
------------------
17. The creditor must obligate the borrower to permit at any time an audit by
the federal/state governments or by their representative, regardless
whether a recourse is possible from the guarantee or whether prerequisites
exist or have existed for such an audit. The creditor must further
obligate the borrower to provide the federal/state governments information
requested by them in relation to the guarantee.
18. The preceding audit rights and rights to information also exist on the part
of the creditor, but only regarding that documentation affecting the
guaranteed credit. The creditor must obligate the borrower to release him
from any vow of silence vis-a-vis the previously specified items.
28
VIII. Audit Costs and Guarantee Compensations
----------------------------------------------
19. The creditor must obligate the borrower in the credit agreement to pay
guarantee compensations to the federal/state governments in accordance with
Section B. 1. of the "Notices" (1993 version) and, furthermore, to bear the
costs of an audit in accordance with Nos. 17 and 18.
IX. Representative of the Federal/State Governments
---------------------------------------------------
20. The C&L TREUARBEIT Deutsche Revision AG, Auditing Company, Tax Consulting
Company, Dusseldorf, is under contract to the federal government and the
states to administer the guarantees of the federal/state governments and is
authorized to release and to accept all related clarifications for the
federal government and the states, provided they are not reserved for
federal/state government debt management.
X. Place of Performance and Place of Jurisdiction
--------------------------------------------------
21. Bonn is the place of performance and place of jurisdiction.
29
F. 12 October 1990
------------------
(1993 Version)
N O T I C E S
for the Request of Guarantees and Credits
of the Trustee Administration in Berlin and/or Parallel Federal and State
Guarantees
for Projects on the Territory of
Brandenburg, Mecklenburg-Vorpommern, Saxony, Saxony-Anhalt,
Thuringia and East Berlin
(specified as an accessing region hereinafter)
A. Application Documentation
I. Creditor Information
---------------------
a) For a Newly Established Project Company:
Partnership agreement/articles of incorporation (drafts, if
necessary) with concise information on equity holders and the
management.
b) For Established Companies, in addition to a):
1. Operational relations, in particular information on the
production program, location conditions, capacities, staff,
market and competition conditions.
30
2. Last annual financial statement in form attested to by an
expert page. Also, situation report/business report and
audit report, as well as opening DM balance for existing
companies in the accessing region, if possible with
incorporation/audit/situation reports.
3. Concise report on the economic development in the operating
business year.
4. For existing companies in the accessing region:
Restructuring concept: if possible, an expert opinion
rendered by an external specialist.
II. Project Information
-------------------
If not already provided in a to-be-submitted restructuring concept:
a) A detailed description of the project, including critical
agreements.
b) Business accounting with explanations.
c) Financial requirements and financing with individual breakdowns.
III. Business Planning Information
-----------------------------
In accordance with the model enclosed as Attachment I with
explanations.
31
IV. Security
--------
Primarily mortgage-related collateral with size and value
specifications; Presentation of collateral lending options in line
with customary banking practices; Justified representation of assets
not to be encumbered/can be encumbered.
V. Other
-----
a) Statement as to whether and to what extent other public assistance
is/will be requested for or in relation to the project by the
borrower and/or by his equity holders.
b) Enclosing a feasibility study conducted by an external specialist
is recommended for the project companies.
c) The right to demand enhanced documentation and information is
reserved.
Applications must be submitted to the Trustee Administration, Berlin,
Leipziger Street 5 - 7, when applying for guarantees and credits from the
Trustee Administration.
Applications must be submitted to the C & L Treuarbeit Deutsche Revision
AG, Dusseldorf, Auf'm Hennekamp 47, when applying for federal/state
government guarantees.
32
B. Costs of Guarantee Assumptions/Credit Guarantees
I. Federal/State Government Guarantees
-----------------------------------
For the assumption of a guarantee, one-time and on-going compensations
as well as set-up and processing fees are imposed on the
applicant/borrower in accordance with the following provisions:
a) Application Fee
---------------
At the time of the application, a one-time application fee is due
consisting of 0.5 percent of the requested guarantee, but, at
most, DM 25,000.00. In case of withdrawal or rejection of the
guarantee application, 50 % of the fee is reimbursed. In the
case of a positive determination of the guarantee, the
application fee is credited against the first of the on-going
compensations.
b) On-Going Compensations
----------------------
The borrower must pay the following guarantee compensations,
starting with approval of and continuing for the term of the
guarantee:
- 0.25 % of the highest amount of the guarantee regarding the
principle claim when the determination of guarantee is
delivered.
- 0.25 % of the guarantee sum after delivery of the
statement of guarantee on the following first of April and
first of October of each year for each six month period
starting at
33
these dates. (The guarantee sum is specified in
the statement of guarantee as the maximum liability amount
for the principle claim, less any repayments. Interim credit
repayments are not considered repayments when using
revolving guarantees/partial amounts of the guarantee.)
If, according to the determination, the guaranteed credit is
split up into many tranches affecting different six month periods
and notarized, then the previous compensation adjustment applies
tranche-related with the understanding that the compensation due
when the determination of guarantee is delivered relates only to
the first tranche and that the first compensations for subsequent
tranches become due with their incorporation into the statement
of guarantee or for a separate guarantee notarization when the
statement of guarantee is delivered.
c) Set-Up and Processing Fees
--------------------------
The federal government and the respective state reserve the right
to impose the following:
- A set-up fee up to 0.25 percent of the extended guarantee
commitment payable to the federal and state governments when
extending the guarantee commitment.
- A processing fee equivalent to the application compensation
adjustment for significant modifications to a previously
granted but not yet notarized guarantee.
34
The application compensation and the processing fee for
significant modifications of a previously granted but not yet
notarized guarantee must be transferred to the C&L Treuarbeit
Deutsche Revision AG, Dusseldorf, account No. 31 308 12 at the
Westdeutschen Landesbank, Girozentrale [clearinghouse],
Dusseldorf.
On-going compensations and set-up fees must be transferred to the
C&L Treuarbeit Deutsche Revision AG, Dusseldorf, "Federal
Ministry of Finance" trust account No. 30 151 12 at the
Westdeutschen Landesbank, Girozentrale, Dusseldorf. Please
specify the guarantee number.
II. THA Guarantees
--------------
The adjustments delineated in the enclosed model agreement apply in
this case.
C. Liability Principles
The liability principles of the federal and state governments are enclosed
as Attachment II. These principles also apply for the Trustee
Administration.
D. Agreement Model
The model enclosed as Attachments III through IX must be used for guarantee
assumptions/credit guarantees.
35
Outline
of financial requirements of the Company
and scheduled financing sources
FINANCING REQUIREMENT
Investments
- -----------
Investments within the project
Replacement investments
Other investments
Financing requirement of participating companies
- ------------------------------------------------
Redemptions
- -----------
Credits secured by mortgages
Other long term and short term credits
Negative results according to separate planning
- -----------------------------------------------
Other financial requirement (increase/reduction in short-term property/liability
- --------------------------------------------------------------------------------
domain)/*/
- ----------
Total
- -----
FINANCING SOURCES
First rank credits
- ------------------
.................} Liquidation possibilities should be described in a
.................} suitable manner (commitment, collateral possibilities, etc.)
Other long-term credits
- -----------------------
with guarantee
other
36
Equity capital additions of shareholders and/or partners
- --------------------------------------------------------
(mandatory bonds)
Depreciations/**/
- -----------------
[ill.] depreciations
Other depreciations
Net addition to long term reserves (for example, pension and severance schemes)
- -------------------------------------------------------------------------------
Asset [ill.] (book values)
- --------------------------
Positive results according to separate planning (minus planned profit averages)
- -------------------------------------------------------------------------------
Public subsidies (investment tax incentives etc.)
- -------------------------------------------------
Other financing sources (decrease/increase in short-term property/liability
- ---------------------------------------------------------------------------
domain)/*/
- ----------
Total
- -----
Credit [ill.]
- -------------
Long-term area (foreign exchange)
Long term area
a) foreign exchange
b) lines
/*/Larger items should be explained specially
/**/Optionally provided value adjustments on capital assets should be considered
separate correction items
37
F. 12 October 1990
------------------
(1993 Version)
L I A B I L I T Y P R I C I P L E S
of the Federal and State Governments for the Requests of Guarantees for
Financing Projects in the Accessing Region
1. As an investment incentive, the federal and state governments have created
the possibility of engaging project companies as borrowers of federal/state
government guaranteed credits for building, financing and operating
projects in the accessing region.
2. The liability of the equity holders can be limited to a reasonable equity
capital deposit. Besides partnership agreement-related adjustments and
cost- and market-compliance delivery and acceptance agreements to be
completed, if necessary, with the borrower, no further business agreements
of these types are permitted whatsoever.
3. When financing projects in the accessing region, it is currently not
foreseeable in a reliable manner whether or to what extent existing
unauthenticated credit acceptances are possible against first-ranking
mortgage-related collateral. Provided this is not (yet) the case, it can,
as a result, be taken into account within the scope of a positive
determination of guarantee that the creditors are obligated for the
availability of collateral in line with customary banking practices and
corresponding to their investment principles. This applies provided they
forego at a subsequent time portions of the guarantee coverage, assuming
agreement with the guarantors and after reaching an understanding about the
intrinsic value of the collateral. In order to alleviate this reassigning
of collateral, the administration of
38
the real collateral to be supplemented, if necessary, by agreement
transfers (delivery and acceptance agreements) must be strived for by a
collateral trustee.
4. Provided businesses from the jurisdiction of the Trustee Administration,
Berlin, are also involved with the borrower, the federal government has
noted that a proportionate parallel guarantee of the Trustee Administration
must be considered in accordance with its direct or indirect participating
holdings in order to alleviate federal/state government guarantee
obligations. Even in this case, the main responsibility for the
determination and administration of the guarantee lies with the federal
government.
5. Regarding the project-related application of the above mentioned
principles: The individual audit adjudicates in accordance with the
submission of real guarantee applications. The individual audit takes both
the point of view of the economical eligibility for promotion and customary
financial reliability criteria into consideration.
6. Dependent on the granting or abeyance of a federal/state government
guarantee, facts are subsidy-relevant in the sense of (S) 264 of the
criminal code. The economic, operating and legal relationships of the
applicant are an integral part of this point, as is the planned credit
usage (Clauses I. - V. under Section A of the "Notices for the Request of
Guarantees and Credits from the Trustee Administration, Berlin, and/or
parallel Federal and State Government Guarantees for Projects on the
Territory of Brandenburg, Mecklenburg-Vorpommern, Saxony, Saxony-Anhalt,
Thuringia and East Berlin"). Willful or extremely careless incorrect
information about these facts as well as the omission of information
contradicting the granting or abeyance of the guarantee can be criminally
pursued in accordance with (S) 264 of the criminal code.
39
The applicant must clearly acknowledge this subsidy instruction when
submitting a request for a guarantee.
40
F. 04 January 1993/03 August 1994
---------------------------------
FEDERAL/STATES
Deficiency Guarantee
(with advanced payment right)
M o d e l
---------
S t a t e m e n t of G u a r a n t e e
----------------------------------------
A credit in the amount of
DM__________________
(in words: German marks)
has been granted to the (Borrower)
by the (Creditor)
in accordance with a credit agreement dated .
Based on (S) No. of the federal budget act for the budget year (Budget Act
) dated (BGBl; [Bundesgesetzblatt; Federal Law Gazette])/9/, the Federal
Republic of German assumes herewith for the purpose of securing this credit a
deficiency guarantee vis-a-vis the creditor up to an amount of DM
(in words German marks), which is %
(in words: percentage) of the original credit sum, plus % of the interest
shortfall in the amount approved by the federal/state governments, as well as %
of the cost shortfall associated with termination and judicial proceedings.
However, the federal government is responsible for these costs only up to 2 % of
the highest amount of the guarantee for the principle claim and on the
understanding that the State of ....... assumes a similar guarantee up to
the amount of DM , plus % of the above specified incidental claims.
- ---------------------------------
/9/ An analogous adjustment applies in this case for state government
guarantees.
41
Credit and guarantee can be utilized with DM
or on a revolving basis with DM /10/.
The obligation of the federal/state governments from the guarantee assumption is
reduced in each case by % of the amounts which are paid for the sustained
repayment of the guaranteed total credit.
The creditor is entitled to use profits realized from utilizing credit-
designated collateral primarily for covering his own percentage of liability on
the principle claims, on standard interests, and on costs associated with
termination and judicial proceedings.
The guarantee is assumed until return of this statement of guarantee, but at the
latest to /11/. Up to this point, the creditor must report his justified
claims to the federal/state governments.
The "General Conditions for Guarantee Assumptions by the Federal Republic of
Germany and the States of the Accessing Region" ( F. 04 January 1993) are a
critical component of this statement of guarantee.
- --------------------------
/10/ This applies only within the scope of operating funds and guarantee credit.
/11/ Twelve months after a scheduled credit maturity.
42